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‘ED takes every case, whether a politician is involved or a businessman, in earnest … cannot initiate suo motu action’

Enforcement Directorate is India’s frontline agency to tackle foreign exchange violations and money laundering. Karnal Singh, Director, ED, who was earlier head of the Special Cell of the Delhi Police combating terrorist networks, spoke to Pradeep Thakur on white collar crime:

ED probes both foreign exchange violations and money laundering, but are we seeing more domestic cases being booked?

We are pursuing both Foreign Exchange Management Act (FEMA) and Prevention of Money Laundering Act (PMLA) cases with the same rigour. In the last three years we have registered more FEMA cases than PMLA. The reason any such impression goes out is because FEMA is a civil case and PMLA is criminal case where we arrest an accused and attach his or her properties. Therefore, the actions taken under PMLA are more visible. In the last three years alone the value of provisional property attachments made under PMLA has crossed over Rs 16,900 crore.

Under PMLA, how is ED’s role in investigating cases under Prevention of Corruption Act different from the CBI’s anti-corruption branch?

The lines of investigation in a predicate offence by both the agencies are different. While CBI investigates a predicate offence and collects evidence to establish a crime, ED is more focussed on establishing the money trail and identifying accused behind money laundering. After investigating the money trail we attach properties and also arrest all accused involved.

For instance, in the coal blocks allocation cases, CBI investigated favours shown by some public authorities to private parties and payoffs received in return. ED’s role is to track the money and its application by the perpetrators who launder proceeds of crime through different channels, including purchase of immovable properties. We go deeper into the money trail, beyond the payoffs, in establishing how much benefits these perpetrators have derived by camouflaging transactions, layering them through multiple shell companies. We also track dubious deals outside the country and take the case to its logical conclusion by arresting the accused involved and prosecuting them.

With changes made in PMLA on disclosing PAN in jewellery and bullion purchase above Rs 50,000 (the new limit revised to Rs 2 lakh), do you think the decision should be revisited to curb money laundering?

Investigation under PMLA is not restricted to the amount involved. The only restriction is that there should be a predicate offence registered by any other agency or the police. PMLA has schedules containing 157 Sections under 29 different Acts. These are called schedule or predicate offences. Only if the offence is investigated by another agency in schedule offences can ED then take action under PMLA.

There have been whistleblower-led leaks of financial data over the last few years such as Panama Papers. Has ED got any leads from these leaks?

The government has formed a committee headed by the CBDT chairman and comprising other members from ED, RBI, CBEC, FIU and SFIO. The committee has examined various cases and referred them for further investigation to agencies concerned. So far, we have got reports of 46 cases related to Panama Papers and expeditious investigation is being conducted in these cases. We are hopeful of finalising these cases shortly.

What about the recent disclosures of Paradise Papers?

In the Paradise Papers the government has again constituted a multi-agency group to investigate them.

ED too is seen by some as an enforcement tool that has become politicised to target opposition leaders. How would you react to this charge?

We cannot initiate suo motu action in any case, it requires a schedule offence to be first registered by any other agency. ED takes every case in right earnest, whether a politician is involved or a businessman. Generally, offenders in money laundering are powerful people and moneyed persons who try to create the perception of unfair actions. They forget that their money laundering is damaging the country which ultimately affects the poor. Those who launder money are working against the nation’s development and creating a wide gap between the rich and poor.

ED has modernised itself in the last two years. We have established six cyber labs across the country – two in Delhi and one each in Mumbai, Kolkata, Chennai and Chandigarh – where all evidence is digitally recorded and seized digital records are decoded. We no more depend on the CFSL (Central Forensic Science Laboratory) for giving its report on digital records seized during searches. We now have enough in-house expertise to decode and authenticate these records which has resulted in faster investigation. Earlier, the reports from CFSL used to take up to two years to come. Now we get them decoded and authenticated in our own labs within a week.